Netstrata Sydney and the Four Corners Investigation

Sydney’s strata landscape is a complex ecosystem, with thousands of apartment owners relying on strata management firms to maintain their buildings and manage shared expenses.

While many firms operate ethically, the industry was recently thrown into the spotlight by a damning Four Corners investigation aired on the ABC. At the centre of the allegations was Netstrata Sydney, a major player accused of questionable practices that have sparked widespread concern and renewed calls for regulatory reform.

Key takeaways:

• The Netstrata investigation highlights systemic risks in strata management, especially around hidden fees and conflicts of interest.
• Owners corporations must prioritise transparency, review contracts carefully, and stay actively engaged in decision-making.
• Choosing the right strata manager is no longer just about service, it’s about protecting your building’s financial and legal future.

The Four Corners investigation: “The Strata Trap”

In September 2024, the ABC’s investigative journalism program, Four Corners, broadcast an episode titled “The Strata Trap.” This program delved into the opaque world of strata management, with a particular focus on the practices of some of Australia’s largest firms, including Netstrata.

The core of the allegations against Netstrata, as reported by Four Corners and subsequent follow-up reports, revolved around:

Excessive insurance fees and kickbacks

It was alleged that Netstrata, through its wholly-owned insurance subsidiary, “Strata Insurance Services (SIS),” charged apartment owners significantly higher brokerage fees for insurance than typical market rates.

The investigation suggested a system where these related entities benefited financially from the insurance arrangements, potentially at the expense of owners corporations they manage.

Non-disclosure of commissions and conflicts of interest

The report raised concerns about Netstrata’s alleged failure to fully disclose commissions received from third-party service providers.

It also highlighted conflicts of interest arising from personal relationships between Netstrata employees and certain suppliers. This raised questions about whether the owners corporation’s best interests were always prioritised when selecting contractors and services.

Failure to obtain multiple quotes

There were instances reported where Netstrata allegedly failed to obtain at least two competitive quotes for expenses exceeding a certain threshold (e.g., $30,000), which is often a requirement under strata laws to ensure value for money for owners corporations.

“Phantom fees” and hidden charges

While not exclusively attributed to Netstrata, the Four Corners program broadly exposed the issue of “phantom fees” and undisclosed charges within the strata industry, where owners found themselves paying for services that were unclear or potentially never fully rendered.

The fallout and Netstrata’s response

The Four Corners investigation sent shockwaves through the strata industry and triggered significant public and regulatory scrutiny. In response to the widespread allegations, NSW Fair Trading launched an independent review into Netstrata’s business practices, conducted by advisory firm McGrathNicol.

Key points from the independent review and Netstrata’s response include:

1. Potential breaches identified

The McGrathNicol report, released in February 2025, identified “potential breaches” of NSW strata laws by Netstrata. These included:

• instances of non-disclosure of commissions to Owners Corporations
• potential conflicts of interest in supplier relationships
• failures to obtain multiple quotes for large expenses

These findings echoed some of the core concerns raised in the Four Corners exposé.

2. Netstrata’s contention

Netstrata publicly stated that it contests “most of the potential breaches” listed in the report, arguing that some findings were “at odds with industry understanding and practices.”

They welcomed the report’s findings that charges for a broad range of services via their subsidiaries were at or below typical market rates, and that owners corporations using SIS often paid less for their total insurance costs.

3. Implementation of reforms

Netstrata has indicated that it has already implemented many of the independent reviewer’s 22 recommendations, including:

• enhanced conflict of interest and code of conduct training for staff
• improved transparency in commercial arrangements
• better visibility and escalation of customer complaints at senior executive levels

4. Ongoing regulatory action

NSW Fair Trading has clarified that the McGrathNicol review is just one component of its broader investigation into Netstrata. Additional matters, such as brokerage fees charged by SIS and other misconduct claims, remain under active review.

The broader impact on strata management in Sydney

The Four Corners exposé and subsequent investigation into Netstrata exposed deeper, systemic issues within the strata management industry. It prompted calls for greater transparency, accountability, and stronger regulation across Australia.

In NSW, the government has responded by introducing new legislation aimed at improving transparency and protecting owners corporations from unfair practices.

What this means for owners corporations

For committees and lot owners in Sydney, this period of increased scrutiny serves as a timely reminder of the need for vigilance and proactive governance. Now more than ever, Owners Corporations should:

• conduct due diligence: thoroughly vetting strata management firms, including reviewing their fee structures, disclosure practices, and client testimonials
• understand the contract: carefully scrutinising strata management agreements to identify any potential hidden fees, commissions, or unfair terms
• stay actively engaged: owners corporations and their committees should take an active role in overseeing their strata manager, asking questions, and demanding transparency
• seek independent advice: when in doubt, get a second opinion. Independent guidance can help when reviewing contracts, tendering for services, or resolving complex disputes

Moving Forward

This moment marks a shift in how strata management is being viewed and regulated in NSW. With new legislation taking shape and investigations ongoing, the message to Owners Corporations is clear: transparency is no longer optional.

Now is the time to reassess how your building is being managed, ask the right questions, and ensure you’re working with a manager who puts owners first.

If you’re ready to take control of how your building is managed, StrataQuote can connect you with trusted and pre-vetted strata managers in your area quickly, confidentially and at no cost.